Insurance and All

07/09/2021

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06/09/2021

What's driving the surge in malpractice claims?

As Eileen Garczynski sees it, her firm’s recent survey of lawyers’ professional liability claims is definitely a good news/bad news type of situation – although that “good news” part might change in the near future.

“Frequency of claims has been leveling off at least in the past year, but claim severity is up,” she said. “So then you have to wonder are people just waiting to file their claims? We’re not sure. Sometimes the uptick in claims frequency doesn’t happen for a couple of years.”

Referencing her firm’s 11th annual survey of lawyers’ professional liability claims, the senior vice president and partner at McLean, Va.-based Ames & Gough says periods of economic downturn like the one caused by the pandemic tend to lead to higher activity on the legal malpractice front, but that activity also tends to unfold over the years following the downturn.

“A good example is if you have an issue with your landlord, which there might be a lot of those cases coming out of this environment,” she said. “You may see your landlord within a year of him evicting you, but then maybe you don’t see your lawyer for something he did as a part of that work for a year or two after that.”

The survey polled 11 lawyers’ professional liability insurance companies that, combined, provide insurance to approximately 80% of the Am Law 250 firms. It found insurers apprehensive about claims that may mature post-pandemic, with most reporting a significant volume of claims last year with substantial reserves and large payouts. In fact, the period beginning in 2019 through mid-2020 marked the worst two years on record for legal malpractice claim payouts, according to the study.

Other findings:

Nine of the 11 insurers surveyed had participated in a claim payout in excess of $50 million in the past two years; two paid a claim between $150 million and $300 million and four paid a claim over $300 million.
Altogether, the survey found the number of claims resulting in larger multi-million-dollar payouts, and the amounts of these payouts, had increased year over year.

While claim severity is continuing to trend upward, frequency was flat last year. Nine of the 11 insurers indicated their claims frequency decreased or stabilized between 2019 and 2020. Of the remaining insurers, one saw claims increase by 6% to 10% and the other by 11 to 21%. By contrast, in 2019, 80% of the insurers surveyed said their claim frequency was the same or higher than the previous year, the first time since 2013 that frequency rose.

“Although the slowdown in frequency may appear to be a silver lining in an otherwise difficult year for legal malpractice claims, it may just be temporary,” Garczynski said. “The economic downturn from the pandemic may lead to more claims.”

Breaking the numbers down by practice area, the survey traced the largest numbers of malpractice claims to three key practice areas: trust and estates, business transactions, and corporate and securities. Interestingly, for the first time, trust and estates ranked highest in the number of malpractice claims for the first time.

Garczynski attributes this mainly due to the sheer volume of engagements involving the baby boomer generation as they continue the largest transfer of wealth in US history. Another driver of claims activity in this area may stem from developments in case law that allow third parties, such as a relative or family member, to bring a legal malpractice claim against an attorney for work performed on behalf of an elderly or sick client.

She also floats a third possibility: the law is changing faster than lawyers can keep up with it.

“Not only do you have that rapid change in laws, the other thing that happens simultaneously is some areas of practice really slowed down (during the pandemic),” she explained. “Litigation slowed down because the courts were closed. So those attorneys that were maybe litigators, they were looking for other kinds of work. And they may have said to themselves, ‘Wow, labor and employment or tax laws is where things are changing pretty quickly, those areas of practice need some help.’”

The trouble starts, she says, when those lawyers dabbling in new areas of practice may not be up to speed on the rapid changes made to numerous laws, including the Families First Coronavirus Response Act, updates to OSHA regulations, HIPAA, the Family Medical Leave and Emergency Sick Leave Acts, tax laws, and various relief legislation that affected clients in different ways.

“So, it could be two-fold,” she said. “It could be attorneys that know that practice very well and it just moves so quickly that they couldn’t keep up… or it’s someone who’s dabbling in a new practice because that’s where the work is, and they make an error.”

Not surprisingly, the survey found the cost of defending malpractice claims continues to increase. Among the insurers surveyed, nine of 11 indicated defense costs increased in 2020 over the prior year. At the same time, the rates insurers pay defense counsel are also climbing; 73% of the insurers reported an increase in rates paid to defense counsel during the past year.

This year, survey participants were asked to list the three most useful risk management techniques for law firms to mitigate legal malpractice risk. Seven of the 11 insurers cited a well-crafted engagement agreement focusing on the scope of work as essential to avoiding risk, along with revisiting it whenever there is a change in direction of the services needed. Five insurers also listed peer review and supervision of work, good client intake and detailed communication among the most important techniques to avoid malpractice claims.

The insurers participating in the Ames & Gough survey were: ARGO, AXA XL, Brit, CNA, Crum & Forster, Liberty, Markel, QBE, Sompo, Swiss Re Corporate Solutions and Travelers.

06/08/2021

MarshBerry snags new VP for organic growth

MarshBerry has announced the appointment of Brandon Hardesty as vice president of organic growth. Hardesty (pictured above) will be based in Woodmere, Ohio.

In his new role, Hardesty will provide management consultation, strategic planning, coaching and sales leadership to MarshBerry’s portfolio of insurance brokerage clients and carriers.

Prior to joining the company, Hardesty served as sales director for commercial programs at Hub International Limited. In that role, he was in charge of hiring and expediting the qualification process of producers, managing and deepening carrier partner relationships, and growing and retaining a $120 million-plus book of business. Hardesty has also served in key business development roles at Allstatelvantage Select Agency, Hays Companies and Wells Fargo.

“Brandon’s 20-plus years of knowledge and experience with carriers and insurance brokers allow him to have an immediate impact on the organic growth goals of our clients,” said Frank Cox, senior vice president at MarshBerry. “We are excited to welcome him to the team.”

06/08/2021

Three insurance coverages that will make a difference in a total loss wildfire

Meteorologists at AccuWeather have forecast an ominous outlook for the 2021 wildfire season. Dangerously dry conditions in recent months, with more than 75% of the western United States experiencing drought, have set the stage for potentially significant wildfire activity, offering no reprieve from 2020’s record-smashing wildfire season.

AccuWeather senior meteorologist Dave Samuhel has predicted that 9.5 million acres of land could burn across the western US in 2021, which would be 130% of the five-year average and 140% of the 10-year average. In 2020, fires devoured upwards of 4.3 million acres in California alone, which is more than double the state’s previous record, and Colorado also witnessed four of its largest fires in state history.

In the past three years 40,000 structures have been destroyed, 100 people have been killed, and $40 billion in insured losses have been incurred due to wildfire, according to the National Fire Protection Association (NFPA). Each year, the US spends at least $2 billion supporting fire suppression, and yet structure loss due to wildfire has increased more than 160%.

While there are many things that homeowners and business owners can do to mitigate the impact of fire on their properties – such as creating defensible space and clearing or reducing fuels located immediately around the structures of a property, or using fire resistant building materials - it’s also important for property owners to prepare for the worst-case scenario of a total loss.

“Preparing your finances is very important, because if you do end up having a loss, you want to be able to rebuild,” said Janet Ruiz, director - strategic communication at the Insurance Information Institute (Triple-I). She suggested three insurance coverages that insureds should ask their agents or insurers about during their annual renewal because they “will really make a difference if you have a total loss in a wildfire.”

Extended replacement cost coverage

After a major catastrophe like a wildfire, a phenomenon known as “demand surge” often increases the costs of construction because the price of building materials and construction workers go up due to the widespread demand. This sudden uptick in costs could push rebuilding fees above the insured limits in a homeowners’ policy, leaving the insured unable to cover the costs of a total rebuild.

With an extended replacement cost policy, insureds can get an extra 20% of coverage above their homeowners’ policy limits (possibly more, depending on the insurance company). This is somewhat similar to a guaranteed replacement cost policy, which will pay whatever it costs to rebuild a home as it was before the disaster.

Building code upgrade coverage (Ordinance or Law)
“This is one that a lot of people don’t think about or plan for,” said Ruiz. Most homeowners’ insurance policies will not cover extra expense related to rebuilding properties to new building codes and standards. Triple-I encourages property owners to consider adding an endorsement to their policy called an Ordinance or Law, which pays a specified amount toward bringing a house up to code during a covered repair.

IBA Talk: Wildfire risk - key trends and the future outlook

This isn’t just for homes in wildfire-exposed areas. Ruiz commented: “It could be [important] if you’re in a floodplain as well, which happens to be where I am based. My home was built in 1979 right on [ground level]. I have a very small foundation underneath that, so if my home burned down today, when I go to rebuild it, I’d have to raise it six-feet off the ground, which is going to cost more money. Building code upgrade coverage will pay for those necessary upgrades – and these extra coverages don’t cost that much; they don’t add that much to your premium.”

Small business insurance

With many people working from home and running their businesses from home as a result of the COVID-19 pandemic, Ruiz said now’s the time to consider whether to purchase a small business insurance policy or coverage endorsement on a homeowners’ policy.

“These things are easy to add on to a homeowners’ policy, but you’ve got to do it ahead of time,” Ruiz stressed. “Don’t wait until there’s a fire in your area to think about these things. Do your annual check-up, and make sure you’ve got the right amount of insurance [to deal with] a total loss.”

06/08/2021

Bold Penguin taps new chief growth officer

Bold Penguin has announced the appointment of Jen Tadin as its chief growth officer. Tadin, an acknowledged leader in small commercial insurance, will be responsible for overseeing the company’s customer solutions, sales, customer success, and ecosystem partnership groups.

Prior to joining Bold Penguin, Tadin held multiple leadership roles at Gallagher, most recently as president of small business, US retail property and casualty. She has also served as sales manager for small commercial at The Hartford and sales executive at Travelers. Tadin serves in many volunteer roles, including as a board member for Female Strong, a nonprofit that aims to empower young girls with entrepreneurial and leadership skills.

“I’ve been a customer and fan of Bold Penguin for years,” Tadin said. “I couldn’t be more excited to join the Bold Penguin team in order to bring commercial connectivity to the entire industry. The future of small business insurance is online, and the Bold Penguin Exchange is the premier platform for enabling digital transactions.”

Bold Penguin operates the largest commercial insurance exchange, which helps brokerages, agencies and carriers to quote and bind commercial insurance efficiently. The company has experienced tremendous growth, starting last year when more than one million quote starts went through the exchange. That growth continued into 2021, with Bold Penguin setting a record for small businesses connected to insurance agents in the first quarter.

Tadin has been charged with harnessing and accelerating that growth. She will lead teams focused on expanding business with carriers, brokers and agencies and serving customer needs. In particular, she will focus on evolving Bold Penguin’s product line to help customers achieve their growth objectives.

“I’ve worked with Jen for many years, and I am ecstatic to have her join the team,” said Jim Struntz, COO of Bold Penguin. “Jen’s experiences working across the small business insurance ecosystem runs deep, and we are fortunate to be adding her to our leadership team. Her direct awareness of the challenges facing small commercial carriers, agents and producers, pared with our vision for the future of the Bold Penguin product suite, will help accelerate the value we deliver to our customers.”

06/08/2021

Consumer Watchdog accuses California insurance commissioner of favoring insurers

Consumer Watchdog has called out California insurance commissioner Ricardo Lara and the working group he convened to address the state’s wildfire problem in insurance terms, accusing the regulator of allowing insurers to meddle in rate adjustments.

The “Climate Insurance Working Group” released a 67-page draft report last week which gives recommendations to expand insurance protection and “strengthen the insurance sector’s role in reducing mounting climate risks.”

But in a response statement, Consumer Watchdog pointed out that the working group excluded discussion of the major issues Californians currently face in the insurance marketplace. These major issues include claims handling following recent wildfires; insurers refusing to reduce premiums or restore coverage when homeowners take steps to protect their homes from wildfire risk; and insurers having nearly exclusive power to choose who can and cannot purchase home insurance coverage after a wildfire.

Consumer Watchdog also claimed that the working group’s draft report deliberately ignores the insurance industry’s role in exacerbating climate change-induced severe weather by underwriting and investing in fossil fuel projects. The group additionally pointed out that Lara’s working group has two insurance industry executives and an industry lobbyist, but not a single consumer representative.

“It’s no surprise that a panel seeded with insurance industry representatives would come up with recommendations for ways that insurance companies can raise homeowners’ rates and withdraw from communities, rather than investigate and address the insurance industry’s role in creating climate change by continuing to insure fossil fuel projects, but it is surprising that the insurance commissioner would countenance those recommendations,” said Consumer Watchdog executive director Carmen Balber.

Balber added that the draft report places responsibility for addressing the insurance marketplace’s problems on consumers, policyholders, taxpayers, and local/state government – “everywhere but on the insurance industry.”

“It only raises climate solutions that the insurance industry can love,” the executive director stated.

Balber also cautioned that insurers are looking to replace decades of actual loss experience with their own “catastrophe models” with algorithms that are not publicly disclosed. Such secrecy would prevent the state insurance commissioner or the public from verifying the assumptions insurers make when setting rates.

“Letting insurance companies exploit the climate crisis to get deregulation under the door would be a huge mistake,” Balber said. “Consumers need more, not less, transparency about the price of home insurance in California.”

06/07/2021

AmeriLife snags new SVP

AmeriLife Group has announced the appointment of Rhonda Fenner as senior vice president for operations transformation.

In her new role, Fenner (pictured above) will collaborate with AmeriLife’s third-party administration and agent services functions to identify and implement core process improvements. She will also enact improvements in agent onboarding and service experiences.

“Rhonda is a highly capable and qualified leader who understands the importance of delivering operational excellence to support our network,” said Tim Calvert, chief operating officer at AmeriLife. “I’m eager for Rhonda’s expertise as we work to transform our processes and supporting technology in order to increase the ease of doing business with AmeriLife.”

Fenner has nearly 30 years of experience working in the financial industry. She has led new business and underwriting operations, call centers, and transaction suitability across the life, health, annuity, settlement-option, and mutual fund lines of business. She also has extensive experience in leading operations process transformation, strategic decision-making, multi-system conversion projects, and the design and deployment of concierge services for top-producing agents.

Prior to joining AmeriLife, Fenner served as senior vice president of financial operations and human resources at CURevl, a credit union services organization. She has also held operations leadership roles at Thrivent Financial and TIAA.

“Whenever a company undergoes rapid growth, existing processes often need to evolve to meet the changing needs of the business, and I’m thrilled to join AmeriLife as it continues its growth strategies,” Fenner said. “I’m committed to helping make AmeriLife’s operations as easy, efficient and enjoyable for everyone.”

06/07/2021

Cyber insurance provider partners with start-up

Cybersecurity start-up ActZero has announced a strategic partnership with cyber insurance provider Zeguro to create a cyber risk management program for small and mid-sized businesses.

With ransomware becoming more common, businesses are increasingly seeking better security products in addition to insurance. Cyber insurers, meanwhile, have advocated for their clients to take advantage of detection and response capabilities, which dramatically reduce the risk of impact from cyber threats. The partnership between ActZero and Zegura will allow organizations to pursue risk management strategies across both paths.

“In today’s evolving threat landscape, companies need tightly integrated risk management solutions more than ever,” said ActZero COO Chris Finan. “We’re excited to partner with the Zeguro team to align incentives by bringing together risk mitigation with risk transfer. For too long, small and mid-size businesses have had fewer resources, and yet it’s clear that they still need to combat the same advanced threats. This partnership enables them to go a step further to protect themselves.”

ActZero’s managed detection and response service provides round-the-clock monitoring, protection and response support, allowing SMBs to effectively manage threats and prevent intrusions through the platform’s combination of threat-hunting expertise, artificial intelligence and machine learning. Zeguro customers can save on their cyber insurance when they become customers of ActZero.

ActZero customers can take advantage of the partnership with Zeguro to affordably attain coverage for loss of income from a breach, payment fraud, ransomware, regulatory fines and more.

“We focus on simplifying cybersecurity and cyber insurance for small and medium-sized business customers,” said Sidd Gavirneni, co-founder and CEO of Zeguro. “Through our partnership with ActZero, SMB customers can save time and money while working to achieve a proper cyber risk posture.”

06/07/2021

Revealed – huge sum paid by police insurer following cyber incident

City officials have confirmed that the Azusa Police Department paid $65,000 in ransom through the agency’s cybersecurity insurance carrier to regain control of its servers in 2018.

Authorities also admitted that city residents were never informed about the breach.

The acknowledgement comes as a recent ransomware attack leaked sensitive records of the police department online.

City officials said that an unknown hacker organization seized control of 10 of the agency’s servers two years ago, prompting it to pay the ransom through its insurance provider.

“We were able to unlock one server after the ransom was paid, but immediately after found a free key to unlock all other locked servers,” Sergio Gonzalez, Azusa city manager, told the San Gabriel Valley Tribune. “We verified with forensic experts that no data was compromised. That’s essentially why we did not and were not required to report it [publicly].”

The 2018 cyberattack was reportedly traced to an email attachment opened by a police employee, unleashing the virus that caused the hack.

Cyber forensic experts were able to clean and restore the servers before putting them back online and city employees were given cybersecurity training. These, however, did not prevent another breach from happening.

The police department discovered another hack on March 09 and reported it publicly on May 27.

Authorities said a ransomware gang called DoppelPaymer was behind the attack. The group demanded 15.5 bitcoin, or about $800,000, and threatened to leak sensitive information if the ransom was not paid.

The company’s insurance provider refused, pointing to recent US Department of Treasury warnings about possible sanctions for ransomware payments to groups considered “malicious cyber actors.”

This prompted DoppelPaymer to post hacked police data, including evidence reports, jail records, and payroll information, on its website. The index page had gathered almost 12,000 views as of Friday.

Officials said that social security, driver’s license, passport, and state identification card numbers, along with financial and health insurance information, might also have been compromised due to the hack.

“These types of attacks are becoming more and more common and, to a certain extent, much more sophisticated,” Gonzalez said. “We are again working to ensure we have the best cyber defense. We have also brought in additional resources by contracting with cybersecurity experts to rebuild our entire system from top to bottom, including upgraded servers, software and anti-virus programs and a more robust backup system.”

06/07/2021

Hurricane Katrina: A defining moment that showed the critical importance of flood insurance

Career-defining moments come in all shapes and sizes. For Lindsey Erickson, chief executive officer of National Flood Services, the week of August 29, 2005, will always stand out as a moment she could confirm, without a shadow of a doubt, the critical importance of flood insurance.

It was the week that Hurricane Katrina made landfall as a Category 3 storm off the coast of Louisiana, battering much of the US Gulf Coast with winds reaching speeds as high as 120 miles per hour. The storm is considered one of the worst in US history, after causing approximately 1,200 deaths and an estimated $108 billion in property damage.

When Katrina struck, Erickson was working for National Flood Services as a customer service representative. Reflecting on the experience, she told Insurance Business: “It was such an emotional event for everyone involved. I remember walking up and down the aisles with boxes of Kleenex because everyone was on the phone hearing stories of devastation from our customers, and people were crying.

“I took a call from someone and I asked: ‘Do you need to report a loss?’ He replied: ‘No, I just need somebody to talk to. I’m sitting on the roof of my house, my family has been rescued, and I’m waiting to be rescued.’ And then he described the flood waters and the things that were floating by, and it really struck me and grounded me in just how important this business is.”

Erickson joined National Flood Services, a flood insurance solution provider and National Flood Insurance Program (NFIP) partner, in 2001 on the customer service team. Since then, she has been focused on the service delivery side of the house over her 20-year tenure.

Prior to her new role as CEO, which she took on April 30, 2021, Erickson most recently served as managing director of strategic initiatives, and, before that, she was managing director of operations. She has developed client engagement strategies resulting in some of the highest NPS scores in the industry, built industry partnerships with the Federal Emergency Management Agency (FEMA) and the NFIP, and served as a go-to regulatory and compliance strategy resource.

What’s driving Erickson is the “monumental impact” that insurance can have to minimize the devastating losses that people experience from flooding and natural catastrophes. She said: “I have supported people through some of the biggest storms the US has faced in the past 20 years – Hurricane Katrina, Superstorm Sandy, and Hurricanes Harvey, Irma, and Maria in 2017 – and I’ve always done so in a position where I get to work directly with our agents and directly with the insured survivors.

“When we’re not responding to a storm, our focus has always been on how we can make the experience better so that our agents can sell more flood insurance policies and we can protect more people when they’re faced with these devastating flood events. That’s always been what has driven me; I have a passion for making this business better so that we can reduce the devastating impacts of flooding.”

Through her 20 years with National Flood Services, Erickson has seen significant change in the flood insurance industry. National Flood Services was initially created for the NFIP’s newly formed Write-Your-Own (WYO) program in the 1980s, at which point, WYOs had quite a backseat role, serving the small flood insurance market.

“There came a time in the last decade where FEMA really started to get focused on the customer experience and trying to simplify this product, and, at the same time, the WYOs also recognized the impact of flooding, and really wanted to protect more people,” Erickson commented. “When you have an industry where FEMA, partners like National Flood Services, and the end insureds are all coming together, and everyone’s seeing the same vision of: ‘We really have an opportunity to make a difference, and serve the public, and provide a program that can be really valuable,’ that’s when things started to change.

“At that point, National Flood Services went from being a behind-the-scenes player to being a true partner, and then we transitioned to being a leader in this space. Our goal is to figure out how to cover more people and properties with flood insurance, and we’re achieving that growth with technology-enabled solutions. That really has been the big evolution of this business.”

The buzzword behind much of the innovation in the flood insurance industry is ‘simplicity’. Everybody’s goal, according to Erickson, is to make flood insurance simpler so that more insurance agents can sell it and more people will buy it. “It’s quite a simple message really,” she commented.

How National Flood Services has gone about it is to use technology to offer a simple and intuitive user interface that takes the guesswork out of the flood insurance application process for insurance agents. Its cloud-based solution is a one-stop-shop for all policy and application tools, from the initial submission to claims management, and it includes self-service features to enable customers immediate access to address their needs.

“We’re leading with innovation, we’re leading with technology, we’re leading with education, and those things are all very intentional as we move forward with our mission to minimize the devastating losses that people experience with flooding,” Erickson stressed. “Our goal is to make the entire flood insurance ecosystem better - and it’s working. More people are being covered by flood insurance, and we’re incredibly grateful that we have an opportunity to be a part of this process.”

06/04/2021

Willis Towers Watson launches insurance program for coral reef

Willis Towers Watson (WTW) has announced the launch of a multinational partnership with the Mesoamerican Reef Fund to develop and implement insurance in a bid to help protect and restore the 1,000-kilometer reef system along the Caribbean coast.

In a Press release, WTW noted that the Mesoamerican Reef Insurance Program is the first multinational collaboration that will design and implement parametric insurance to cover hurricane risk to the Mesoamerican Reef (MAR) and the communities that depend on it for protection, food and livelihoods. Pilot insurance for reef sites in Mexico, Belize, Guatemala and Honduras will enhance the climate resilience of nearly two million beneficiaries.

The Mesoamerican Barrier Reef System is listed as critically endangered by the International Union for Conservation of Nature’s Red List of Ecosystems. The reef system is home to 65 species of coral and more than 500 species of fish along with many other protected species. Coastal wetlands, mangrove forests and seagrass beds also protect against storms and coastal erosion.

Thanks to the effects of climate change and other stressors, the risk of hurricane impact leading to irreversible coral degradation and mortality has grown.

“Early action to clean up the reef and jump-start regeneration and recovery is critical to reducing the overall impact of lost ecosystem services – in both social and economic terms,” WTW said. “However, the restoration of natural ecosystems is often not a priority in the aftermath of extreme events, as resources are focused mainly on grey infrastructure and property.”

The new project is being co-funded and implemented by WTW and the Mesoamerican Reef Fund, the regional financing system for large-scale maintenance, conservation and restoration of the reef system. MAR Fund will be the policyholder for the program.

“In 2018, we launched the Global Ecosystem Resilience Facility at the World Ocean Summit in Cancun,” said John Haley, CEO of Willis Towers Watson. “We are delighted to be back in Central America, partnering with the MAR Fund and supported by the InsuResilience Solutions Fund, to build resilience of the Mesoamerican Reef and its communities.

“Marine ecosystems may be ‘free’ public goods, but their active maintenance is essential in sustaining their health and value. This program helps us learn how insurance can provide a unique shared governance framework to manage reefs and other valuable natural ecosystems.”

“This collaboration is a great opportunity for the MAR region,” said María José González, executive director of MAR Fund. “We see the insurance model as a risk management tool that will provide immediate funds for reef restoration, thereby contributing to strengthening coastal resilience, and to the recovery of the MAR and the environmental services it provides. MAR Fund will be the policyholder and will manage the payouts. We will work closely with national governments and other partners and stakeholders to build the needed capacities for emergency response and preparedness.”

The InsuResilience Solutions Fund (ISF) has signed the grant funding agreement for the program.

“This partnership combines the expertise of local partners and the insurance sector, ensuring that products are developed according to the needs of the vulnerable population,” said Annette Detken, director of the ISF. “Our grant will co-fund the development and implementation of this innovative insurance product insuring coastal ecosystems that provide much-needed services for local communities. We believe this insurance solution could serve as a model for other countries seeking to protect important natural resources like coral reefs.”

Payouts under the program will be triggered by the intensity of a hurricane, converted to an estimate of the extent of damage to the reef. A group policy will cover the pilot reef sites, with a tailored payout structure reflecting the cost of response at each site at different damage levels.